Cochlear welcomes $8m boost

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Cochlear received a small but much-needed dose of good news when the Treasurer, Peter Costello, unveiled an $8 million provision over four years for profoundly deaf children in Tuesday night's Federal Budget.

The ear implant developer's share price jumped 55c to $20.90 yesterday as Lucy Dwyer at Credit Suisse First Boston described the additional funding as a "small positive".

Cochlear's chief financial officer, Neville Mitchell, said he was "very surprised" by the special mention in the budget, adding that it was "very welcome".

The $8 million will be used specifically for children needing upgrades to their existing hearing implant devices. In the first year, $2.4 million will be spent on 330 upgrades on the waiting list, with a further 230 upgrades expected each year after that.

"We're very appreciative of what the [Federal Government] has done," Mr Mitchell said. "The burden is on the state governments, which have provided some funding for children to receive implants, but there's still a significant waiting list for adults.

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"It's important Australia does have adequate funding, even if Australia only accounts for 3 per cent of our sales."

Andrew Goodsall, of Citigroup Smith Barney, said that while the funding was small, it was "just the sort of boost that will help Cochlear towards revised net profit targets".

Mr Goodsall added that the extra $2.4 million in fiscal 2005 was equivalent to selling an extra 100 implants a year.